Do you remember your mother or father telling you the old saw, “Money doesn’t grow on trees.” You were a child and wanted something your parents could not afford. You may have thrown a fit, but if your parents were responsible, they would not give in in order to teach you a valuable lesson about human limitation. Human beings can only buy as much as their resources allow. Any responsible parent knows that going into unnecessary debt can harm the entire family. A family receives a finite income every year. A family whose income is $50,000 a year should not buy a $40,000 car or a $1,000,000 home.

Businesses also realize that they can overreach–when a business overspends beyond the benefits and loses money, that one failure can sometimes destroy, or at the very least weaken–that business. The same thing is true with local governments and most state governments. California, with its past history of profligate spending, is an important exception–and an important lesson on recognizing that resources have limits.

The federal government has not learned these lessons. George W. Bush began the current spending spree, with the mainstream Republicans in Congress, wanting to gain votes, appropriating the money. When the banking crisis occurred, Mr. Bush and Congress spend billions on a massive bail out. But what Mr. Bush did is child’s play compared to Mr. Obama’s free spending ways. What was billions in debt quickly became trillions, to the point that there seems no end to the massive debt of the United States. China holds us over a more precarious pit than was present in the Bush administration. Problems with the Euro have helped the dollar to survive as a viable currency despite massive supply due to the government printing more money–but eventually supply and demand will catch up with the dollar. The threat of hyperinflation looms over the United States to a greater degree than in any recent decade except the 1970s.

The American people’s desire for a utopia on earth has driven massive spending. Unlike Europe, which spent freely due to people wanting la dolce vita after seven years of brutal war, American’s desire to benefit from government had already begun in the 1930s with the Roosevelt administration‘s rapid expansion of federal programs in response to the Great Depression. Americans, no longer disciplined by hardship and war, turned to government to solve social problems and to provide benefits for the middle class. The idea was that only government had the massive resources to fight poverty (Lyndon Johnson‘s “Great Society“) and protect the middle class through social security, unemployment insurance, and Medicaid. Now government has been used by Mr. Obama to solve another financial crisis and to expand social welfare benefits. Cuts in defense spending are not nearly enough to make up for massive social programs. Thus the problem of debt is just as unsolvable in the United States as it is in Western Europe. Mother was right–money does not grow on trees–and the worth of money is not guaranteed by the government’s printing more bills. Currency traders will not ignore economic reality forever. The United States, like Western Europe, will be driven to recognize its limitations if it must be driven kicking and screaming.

Classical liberalism is superior to social democratic liberalism, but it still has an overly optimistic view of human nature and often does not recognize human limitations. Many classical liberals believe that science and the private sector will create an ideal society, and such a belief can clash with economic and other human limitations. Adam Smith believed that a society made up primarily of virtuous people, civilized by Christianity and Western culture, would make the “invisible hand” work. With the breakdown of key virtues such as taking responsibility for one’s behavior and integrity, the capitalist system will be corrupted. Even if it were not corrupted, resources for the well-being of people are finite, not infinite. Science and the market can substitute for God just as much as “the People” substitute for God in Marxism.

The truth is that there is no ideal world that any economic system can make. The world will always be a mixed bag of good and bad. People can do what they can to alleviate the negative and “accentuate the positive” (as my late colleague Parker Wilson used to say). To do so with massive government aid programs or social engineering programs creates programs that almost always fail, and the government spends more money and goes deeper into debt. Because social democratic liberals cannot follow a mother’s or father’s aphorism that “Money does not grow on trees,” the country in which I was born and reared may become unrecognizable sooner rather than later.

In the future the United States will not be the country it once was–thank God. The U.S. will not have the money to keep its empire, and like all empires, it will lose its client states such as Iraq and Afghanistan. If we’re lucky, U.S. troops will also be withdrawn from South Korea and from Europe. The utopian Wilsonian idea that the United States has the duty to “spread democracy to the world” will hopefully be laid to rest. The military-industrial complex, with its drain on resources and its support for continual warfare may fade away, hopefully to engage in manufacturing more than instruments used to kill other human beings.

Even if the empire falls, the money saved will not be nearly enough to balance the budget or stop high deficits. The welfare state, developed during the massive New Deal programs designed to ease the Depression (whether they did or whether they prolonged the Depression is a matter of legitimate debate), and vastly expanded under Lyndon Johnson, will have to make deep cuts in its programs. It may be too late to avoid social chaos. Years of making people dependent on the government have contributed to large numbers of individuals who take advantage of the system and do not attempt to get a job. Those who do try to work quickly realize that welfare leaves their families better off than a job–even a job that pays significantly more than minimum wage. Although there are many exceptions, there are also many people in the underclass whose behavior is morally lacking. Promiscuity, drug use, drug dealing, a failure of fathers to care for children–all are the products of the welfare state, moral relativism, the decline of the family, and the decline of religion. If the federal welfare state is dismantled, there may be social chaos for a while, but hopefully the dismantling would force people out of the dependence on government mindset and encourage them to go to school, go to work, and contribute to the American economy, both monetarily and in the old sense of the word “economics,” oikomounia, the social economy that is part of every household. When the household is run well, this helps the overall economy by providing productive workers to the workforce, and it helps the social and political economy by providing virtuous people to contribute to society’s good.

There are no guarantees. But the United States may default on its debt if current spending levels are not radically lowered That could lead to a Depression and to violence in the streets. A firm hand in dealing with phenomena such as flash mobs should restore a measure of social order, although it will take decades to expunge the harm of the New Deal and of The Great Society. These systems have helped undermine the basis on which republican government can be run. People who demand “bread and circuses” from the government seldom make good citizens.

Welfare is a necessity is some cases when there is no family or friends to help someone who is having a difficult economic time. Its allocation by government should remain, at the broadest, at the state level. The United States has become too large to effectively govern, and it may be in the future that at least some of the states will be independent or have more limited autonomy from the federal government. Local resources can be used to help those locally in need. Then the United States should have policies that encourage Americans to manufacture items in this country. If more manufacturing comes, this would ease the burden on society by giving jobs to those previously were not able to find work.

Entitlements of every kind must be cut. The U.S. has no other choice. Pork barrel projects must cease. If the president refuses to have fiscal discipline due to his support of the welfare/warfare state, someone should point this out. Cursing out the Tea Party, as Maxine Waters did, reveals her ignorance of economics–that the United States must get its fiscal house in order, balance the budget, and use any surplus to help to pay the national debt. If fiscal responsibility does not happen, any recognizable U. S. may quickly succumb to the resulting economic chaos.

Many Americans (not all, thank God) are spoiled. They don’t mind selling their children and grandchildren to a world of financial ruin as long as they are comfortable. They desire benefits from government without understanding the cost. So the nation is in debt to a degree that would have been unimaginable even under the free-spending George W. Bush administration. How did the country get into this mess? How did the traditionally hard working American people turn into a group of soft, spoiled brats who believe the government is there to give them things?

The problem started with the Great Depression. Instead of allowing the private sector to correct the economic downturn, as President Harding did in 1919, first President Hoover, and to a much greater degree President Franklin D. Roosevelt, tried to end the Depression with massive federal intervention. Despite the claim by liberals that the New Deal helped to end the Depression, unemployment was high up until the boom due to World War II. Artificially inflating wages led companies to lay off more workers, which led to less spending, which led to more of an economic downturn–it was a vicious cycle. The jobs programs, to give them credit, resulted in fine roads and beautiful buildings, but did little to lessen unemployment. But as permanent federal benefits were put in place (even though there were state benefits such as old age pensions so that older people were not left destitute), Americans increasingly saw the government’s function to give them things–at first jobs, later money, health care coverage, and other benefits.

Even after Truman, Eisenhower, and Kennedy continued Roosevelt’s federal benefits, federal spending after World War II was generally under control. Eisenhower balanced the budget three times. But the largest expansion of the federal government in history took place with Lyndon Johnson’s “Great Society.” Medicare, Medicaid, federal housing programs, and huge expenditures on welfare only made worse the public attitude that the government was a “nanny state” whose function is to take care of people’s physical needs. Programs that would have done more good at the local level were in the hands of distant bureaucrats, and a permanent underclass dependent on welfare payments was created.

But the government has also been guilty of corporate welfare. The unholy alliance between business and government began with the Whigs’ strong support of the new industries springing up with the Industrial Revolution and continued with the Republican Party’s alliance between the federal government, the railroads, and the banks. It was mainly the tension between the industrial North and its alliance of government and industry and the agricultural South that led to the War between the States (slavery, which was supported by the majority of the public in both the North and South, was not the primary issue over which the war was fought). Industrialism triumphed, and the unholy alliance led to numerous scandals beginning in the Grant administration. Today people vote for the presidential candidate and congressional candidates whom they believe will improve the economy. This is also a position that the government can give the people things–this time, a sound economy. Although some government regulation of business is required because people are not saints, the revolving door between big business and government officials only makes matters worse. Overall the economy tends to move in cycles that are only predictable in part due to their nature as dynamic, chaotic systems. The government can do a lot to help wreck the economy, but generally what it does best beyond essential regulation is to stay out of business. But people believe that one of the chief roles of government is to guarantee a good economy–and voters become prostitutes. It is just as bad for voters on the right to “vote their pocketbooks” as it is for voters on the left to vote due to their desire for more government benefits. But between the two, I prefer the right–at least they recognize that government does more harm than good to business.

Americans need to realize that concentrations of power and money tend to corrupt and tend to bankrupt. There are only so many resource available for people to share, and the government cannot keep spending at the rate it does on benefits and job programs (and defense!) without the Chinese eventually calling the United States in on its debt. When that happens, God help us. Perhaps then families will realize that they must work for themselves and for the good of their local communities instead of receiving handouts from a nanny government. They may have no choice. The sad thing is that such a scenario may be a good thing–it may be the only way to restore virtue to those in the United States who have been spoiled by a sense of entitlement.

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